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“S.U.R.E.-Fire Direct Response Marketing provides all direct marketers with thesolid fundamentals for conquering sales lead and revenue generation in the tronic world.. Gaining Insight i

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Praise for S.U.R.E.-Fire Direct

Response Marketing

— BY R USSELL K ERN

“This book takes the guesswork out of planning, strategizing, and implementingeffective direct marketing campaigns and provides a step-by-step answer to thequestions direct marketers frequently ask After reading this book you can improveresponse rates, reduce your marketing risk, increase lead quality and sales revenue,and maximize relationships with your customers.”

S.U.R.E.-JEFFREYP GAIA, President

Business Banking Group Bank One Corporation

“S.U.R.E.-Fire Direct Response Marketing provides a practical and truly

compre-hensive approach to successful direct marketing for companies large and small Kerncombines time honored techniques with important, evolving innovations in suchareas as E-mail marketing and banner advertising I found his discussion of CRMand data mining particularly valuable This book will prove highly useful to thedirect marketing novice and experienced practitioner alike.”

ALISAS MACLIN, Program Director

Solutions Marketing IBM

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“S.U.R.E.-Fire Direct Response Marketing provides all direct marketers with the

solid fundamentals for conquering sales lead and revenue generation in the tronic world This book helped me think of more than, $100,000 ideas to improvesales at VeriSign that I am working to implement.”

elec-ERICMORLEY, Group Manager

Outbound Internet Marketing VeriSign, Inc.

“Direct marketing at its best is a disciplined process What Russell Kern has plished in this book is to codify B2B marketing in a disciplined step-by-step process

accom-that is geared to achieve superior results This book isn't meant for a library shelf.It's meant to be kept at your side for quick reference.”

JEROMEW PICKHOLZ, Chairman

PickholzTweedy+Company Chairman Emeritus, Ogilvy & Mather Direct

“Russell Kern is one of the best business-to-business direct marketers around That

he has found the time to put his experience and wisdom down on paper is a

bene-fit to us all His chapter on offers is as good as it gets: clear, step-by-step instruction,explaining both the theory and the practice Bravo.”

RUTHP STEVENS, President

eMarketing Strategy.

Adjunct Professor of Direct Marketing, New York University

“If you want to know how but have to know now, S.U.R.E.-Fire Direct Response

Marketing has your answer Russell Kern packs theory and real-world examples

side-by-side in what’s destined to become a classic text for the direct marketing world.”

BRADWHITWORTH, Communications

Manager, Computing Systems Hewlett-Packard Company

“There are two secrets to direct mail: test and measure Russell Kern knows both ter than almost anyone I know Buy this book!”

bet-SETHGODIN, Author,

Unleashing the Ideavirus

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Direct Response

Marketing

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Russell M Kern

President/CEO of Kern Direct Marketing

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Copyright © 2001 by Russell M Kern All rights reserved Manufactured in the United States

of America Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database

or retrieval system, without the prior written permission of the publisher

0-07-139567-9

The material in this eBook also appears in the print version of this title: 0-658-00622-3.

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INFORMA-or otherwise.

DOI: 10.1036/0071395679

abc

McGraw-Hill

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Idedicate this book to my wife, Lynne, and to our children.Lynne, thank you for your love, support, and constantencouragement Your love of writing and creativity is a con-stant torch of inspiration to me Thank you for standing byand making this journey a success.

Michelle, Sean, and Hillary, thank you for putting up with myconstant writing (even on our ski trip) I hope you will alwaysbelieve in your dreams You can make them come true, if youconsistently chip away at them And, of course: go slow, staycalm, and write neatly

I love each one of you deeply

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Gaining Insight into Your Situation 2

SWOT Analysis for a Lead Generation Campaign 3

Analyze Your Competition 6

Further Analysis 6

Summarize the Answers 11

Competitive Advertising Review 11

Determine Competitive Ad Spending 13

Collecting Competitive Direct Mail and E-Mail 15

Summing Up 16

KNOW THE MARKET AND KNOW YOUR NUMBERS 

Media- and Market-Opportunity Analysis 18

Before Campaign Implementation 20

Conducting the Analysis 21

Financial Analysis and Projections 27

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BRIDGING THE GAP BETWEEN MARKETING

Focusing on Your Sales Process 42Customers Buy at Their Own Speed in Their Own Time 42The Eight Phases of the Buy Cycle 43

Conducting Buy Cycle Analysis 45Strategies to Advance Prospects Through the Buy Cycle 50Win/Loss Analysis 54

Conducting Win/Loss Analysis 54Use Knowledge of the Sales Process to Prepare Your Unique SalesProposition 56

Strategic Planning Using a Product Life Cycle Positioning Curve 59Using the Product Life Cycle as Direction for Creative

Development 61Creating a Plan of Attack 61Summing Up 63

Why Market Research Is Effective 67Building a Winning Marketing Case 68Six Steps to Understanding for Empathy 69Benefits of Combining Qualitative and Quantitative Research 70Managing Research: Begin with the End in Mind 73

Research Participants 74Orchestrating and Conducting One-to-One Interviews 76Analyzing Data from One-to-One Interviews 80

One-to-One Interviews as the Springboard to Creative ConceptDevelopment 80

Preparing an Effective Focus Group 87How to Get the Best Results 90

x Contents

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How Focus Groups Improve Direct Response Creative 93

What to Do After Your First Session 96

What to Do Once Focus Group Studies Are Completed 96

Using Quantitative Mail-Based Surveys 97

Tabulating Your Results and Reading Your Findings 102

Summing Up 104

Why Generating Sales Leads Is Important 106

The Physics and Psychology of Lead Generation 107

The Three Types of Offers for Business-to-Business

Marketers 111

How to Select Your Response Generation Offer 118

The Power of the Free Trial 122

The Power of Personalized, Value-Add, Interactive Websites 123

Summing Up 123

Common Response Management Weaknesses 126

Managing the Sales Inquiry 129

Use Lead Qualification to Make Salespeople’s Time

Productive 135

Distribute Leads Fast 138

Establish a Lead Fulfillment Strategy That Advances the Sale 139

Follow-Up: The Great Variable 150

Telesales: The Secret Weapon 150

How to Avoid Inside Sales Failure 152

Closed-Loop Lead Tracking Systems 154

Outsourcing Versus In-House Response Management 156

Marketing Automation of In-House Response Management 159

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EXECUTION EXCELLENCE 

Moving Beyond the Rule of 40-40-20 164Maximizing Results by Pinpointing Delivery of Your Message 164S.U.R.E.-Fire Strategies for Selecting Direct Mail Lists 165Selecting Print Media with Excellence 176

Selecting Electronic Media to Generate Sales Leads 179Measurement: The Key to Program Effectiveness 182The Power of Testing 184

What to Test 185Guidelines for Conducting Direct Marketing Tests 191Summing Up 193

Integrating Strategic Planning and Research Results into theCreative Process 196

What Makes a Creative Concept a Winner? 203

A Clear Creative Strategy Underlies Winning Creative Concepts 204

Kern’s Rules for Direct Response Creative Excellence 205Summing Up 215

Choosing a Direct Mail Package 217Choosing the Best Promotional Direct Mail Format 219Getting Your Envelope Opened 221

An Army of Salespeople in Print: The Power of Your Sales Letter 223

Twelve Letter-Writing Approaches Proven to Work 225The Value of Brochures in Your Package 227

Lead Generation Print Advertising 229The New Standard: Electronic Direct Response Advertising 237Developing Direct E-Mail 238

Techniques to Boost Your E-Mail Effectiveness 238Using Web-Page Banner Ads 239

The Splash or Landing Page 240Summing Up 242

xii Contents





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THE INTERNET: THE MARKETING MEDIUM

Future Shock: Responsiveness Will Shape Marketing

Strategy 243

Shortening the Measurement Cycle 244

Taking Advantage of a New Medium’s Capabilities 245

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In addition, I would like to thank:

Kate Bertrand, for her invaluable writing assistance She believed in me and inthe value of this book from its inception to its completion

Jim Obermayer, for his contributions and guidance Jim’s knowledge ofresponse management systems, the lead generation process, and sales managementwas vital to this project

Rhonda Vinton and Rachel Taylor, for working closely with me in defining andrefining the S.U.R.E.-Fire research process

The entire staff of Kern Direct, for their support in the development of thisbook In particular, I would like to recognize Kassie Gavrilis, Elaine Benditson,Inna Stone, Brad Pagano, Ruby Carrillo, Emily Orozco, Stacey Bartholomew, JuliaMiller, Jonathan Eun, Jay Jacobesen, Maria Spear, and Katie Morris for their hardwork and extra effort in bringing this project to fruition

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This book would never have been written without the experience I have gainedover the years from my direct marketing peers and colleagues, particularly: JohnCoe, Bernie Goldberg, Vic Hunter, Tracy Emerick, Bob Hacker, Richard Rosen, RayJutkins, Ruth Stevens, Michael Brown, Mike Wallen, Dennis McGuire, David Bell,Mac McIntosh, Robert Bly, Bob Stone, Ed Nash, David Ogilvy, Joan Throckmorton,Les Morris, Phil Herring, Craig Walker, Steve Colich, Jim Pratt, Jack Daly, LouiseGuryan, Glen Freidman, Laura McQuire, Lester Wunderman, Stan Rapp, DougDrew, Jerry Mathai, and my first agency partner, Carl Parsons.

Finally, in my twenty-plus years in this business, I have found that there are nobetter teachers than my clients I must thank all the people who have given me theopportunity to create direct marketing programs or implement the S.U.R.E.-Fireprocess on their behalf These people include but are not limited to: Tina Babbi,Doron Aspitz, Ofer Matan, Shannon Hughes, Deborah Henken, Joe Williams, TomGrant, Maddy Ginsberg, Susan Zykoski, Linda Haury, Eric Morley, Zarnez Arlia,Cori Kaylor, Joanne Urbanik, Tom Toperczer, Dan Carmel, Jennifer Saunders, TracyGroves, Peter Soderberg, Matt Hill, Bill Middleton, Debbie Erickson, Jane King,Jennifer Harper, Lisa Hiatt, Loren Zeller, Lori Kaplan, Susan Albano, Ross Goldberg,Lori Harmon, Bobbi Maselli, Scott Anderson, Terry Rosson, Andy Chase, GeriCohen, Jackie Rutkowitz, Lou Ryan, Mary Culley, Frank Jones, Chris Grejtak, JudyLaine, Nancy Stinettet, Tracey Mustacchio, Alyce Menton, Jeff Gaia, Hanna Irwin,Kristen Burke, Cheryl Spekhardt, Mike Collett, Paul Stout, Dave Campbell, MaryLudloff, Susan Cassella, Raj Jaswa, Rathi Almaula, Rose Maugeri, Alley Neal,Jacqueline Meaney, and Alexis Kim

Finally, I thank my mother, brothers, and sister for pushing me to complete thebig stuff and always supporting my business endeavors and my father, who I willalways remember for teaching me the love of learning I want to thank Marty andAudrey Appel for their encouragement and support Paul, Allen, Lenny, and Daveyour friendship counts And many thanks to Bill Pasnau for his unwavering friend-ship and continued guidance in my development of a repeatable process that has thepotential to change an industry

xvi Acknowledgments

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Communication is not just words, paint on canvas, math

symbols, or the equations and models of scientists; it is the

interrelation of human beings trying to escape loneliness,

trying to share experience, trying to implant an idea.

Advertising executive

The Direct Marketing Association predicts business-to-business direct marketingexpenditures will grow 7.4 percent annually, to $118.3 billion by 2003 The DMAalso predicts that fully 56 percent of this $118.3 billion will be used to generate salesleads Technologies and tools such as personal computers, teleconferencing, mar-keting automation software, and, of course, the Internet are catalyzing this growth

in business-to-business marketing The new technologies are making leadgeneration marketing strategies possible in cases in which they were not cost-effective in the past Now you, as a business-to-business direct marketer, can deliverpersonal messages at a very low cost, obtain instant result measurements, andchange campaign elements (such as offers or messages) on the fly

Yet even with the Internet and all the new high-technology software tions, the fundamentals of direct marketing have not changed Campaign planning,creative writing, advertising design, and production management are central.Knowing the fundamentals of direct marketing and how to manage the direct mar-keting process remain crucial for your programs to succeed The Internet is thebiggest and greatest direct marketing medium ever However, its users, your poten-tial customers, are just people—people who react based on their own humansituations They respond or do not respond to your marketing messages based on

applica-xvii

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their personal needs and desires To maximize the return on marketing ments, you will have to strategically plan, research, implement, and manage yourdirect marketing programs with the goal of tapping into these emotions Excellence

invest-in all parts of the process is the key to makinvest-ing that happen

This book is for both seasoned and novice business-to-business directmarketing professionals—anyone responsible for generating sales leads and con-verting them to revenue If you are a seasoned professional, you will find a com-prehensive approach to the direct marketing process and valuable reminders of thefundamentals, which can be used to evaluate campaigns or train others If you are

a novice, you will learn the basics of lead generation in a framework that is easy tounderstand, remember, and implement All readers will learn how to use printedand electronic direct response advertising to generate sales inquiries You will alsolearn how to use advanced print and electronic direct marketing strategies to con-vert inquiries into customers

The S.U.R.E.-Fire direct response planning process—unique to this book—isdesigned to give you more marketing confidence by providing you with a compre-hensive, four-phase approach to business-to-business sales lead generation andinquiry nurturing The S.U.R.E.-Fire process will help you reduce your marketingrisk whether you are a business-to-business direct marketer at a large company or

a small one The process will help you stop making assumptions about marketwants, stop selecting creative by guesswork, and stop failing to anticipate crucialimplementation details If you were trained to rely solely on “in-field live” testing,this book will encourage you to try some of the research methods used by your peers

in general advertising as a way to avoid costly test failures

Business-to-business direct marketers are under pressure to produce results,

so they shy away from up-front planning They also are budget conscious andbelieve they cannot afford market research All too often, they rely on ad hoc meth-ods to manage campaigns Such seat-of-the-pants approaches to lead generationcampaign development need not be standard operating procedure This book offers

an alternative to crapshoot marketing Just like the professional portfolio managerwho invests a client’s money based on proper planning and financial research,business-to-business direct marketing professionals must do the appropriate work

up front The four phases of the S.U.R.E.-Fire process lead to proper planning,research, and implementation of sales lead generation campaigns This process willimprove your overall campaign effectiveness It will help you increase your leadquality and quantity—and your sales

xviii Introduction

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Introducing the S.U.R.E.-Fire Direct Response

Planning Process

The S.U.R.E.-Fire planning process is based on a review of over five hundred directmarketing campaigns that produced more than nine hundred thousand sales leadsfor more than forty-three companies in twenty-two industries These campaignsproduced by Kern Direct Marketing represent a combined advertising investment

of more than $40 million, made on behalf of my clients during a twenty-yearperiod The day-to-day, hands-on, in-field experience I have gained by imple-menting lead generation programs and closely monitoring their results has enabled

me to create the S.U.R.E.-Fire process The S.U.R.E.-Fire acronym stands for:

S: Strategic Planning Before Implementation

Engaging in comprehensive discussions about program goals, objectives, gies, and tactics before a single word is written or picture drawn is key to a program’ssuccess During planning meetings, all members of the marketing and sales teamshave a chance to express their concerns and opinions so these factors can be con-sidered up front Strategic planning is the first phase of the S.U.R.E.-Fire process

strate-In this phase, you use analytical tools such as SWOT analysis, media- and opportunity analysis, financial analysis, sales-process analysis, and unique salesproposition definition to give your marketing team a foundation for the directmarketing process In Chapters 1 through 3, you will learn how and when to dostrategic planning and use these analytical tools

market-Introduction xix

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xx Introduction

Follow-up Focus Groups &

Sort Testing

Validation and Confirmation Survey

SWOT &

Competitive

Analysis

One-to-One In-Depth Interviews

Initial Focus Groups &

Sort Testing

Response Generation

Media & Market

Relationship Marketing

Response Capture

& Qualification

Response Distribution

Response Fulfillment

Conversion Strategies

Measurement

Refinement of Creative &

Offers

Winning Concepts

Winning Offer

Winning Concept Winning Concepts

quickly convert them to revenue Copyright 2000 Kern Direct Marketing, Inc All rights reserved.

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U: Understanding Customers and Their Issues

To conceive and write effective direct response advertising, you must know whatyour prospective customers worry about, what their opinions are, and how theythink Developing empathy for your prospective buyer is the foundation for the sec-ond phase of the process In this second phase, you will learn how to use qualita-tive and quantitative market research to conduct in-depth one-to-one interviews,develop a message map, evaluate creative ideas, rank offers, and identify conceptsthat have the most interest to your target audience In Chapters 4 and 5, you willlearn how to integrate three market research methods to reduce your marketing riskand stop the guesswork of campaign concept selection

R: Response Management—Generation and Conversion

Response management is an essential part of the S.U.R.E.-Fire process It includesgenerating and capturing responses and developing a relationship with the prospect

to make the sale The first part of response management is response generation Thisrequires a self-qualifying offer that appeals to the personal interests of prospectivebuyers The stronger the offer—the better it solves the problems of prospective buy-ers—the greater response will be In Chapter 6, you will learn about the power ofoffers, including how to structure direct response offers and how to promote them

to maximize response

The second part of response management is converting sales inquiries into ers This requires a robust response management system that works in concert withthe buying process of customers and with the selling system of your organization Aresponse management system needs to capture sales inquiries, qualify them, and dis-tribute them automatically to the sales organization In addition, it must recognizethat converting sales inquiries into customers takes time The second part of responsemanagement focuses on the latest permission-based relationship marketing meth-ods for staying in contact with prospects until they are ready to buy In Chapters 7and 8, you will gain insight into best-business practices of response management, seethe statistics that validate the importance of long-term lead nurturing, and learn thetechniques involved in customer relationship management

buy-E: Execution Excellence—Implementing the Marketing Fundamentals

The fundamentals—media selection, creative development, testing procedures,results analysis, and production controls—will never go out of style Developingcompelling graphics, writing clear copy with precisely targeted messages, organizing

Introduction xxi

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marketing tests, and managing the details of direct marketing are the central themes

of the fourth phase of the S.U.R.E.-Fire process In Chapter 9, you will examinemedia selection, ranking, and planning You will also learn how to manage the details

of testing strategies In Chapters 10 and 11, you will learn about creative excellence,including how to integrate findings from the earlier phases of the process into finalimplementation These chapters also explain how to evaluate and manage the cre-ative process of direct response print advertising, direct mail packages, E-mail, andbanner advertising

It is my hope that this book will serve as a valuable reference for you—one youwill use for every lead generation campaign you manage

A Note on Use of Terms To help your reading, I have used the word products to

rep-resent both products and services You will find the words suspect, prospect, and

cus-tomer throughout the book Suspect refers to a person or company that has not

initiated a sales dialog with you A prospect is anyone who has responded or inquired

about getting more information For example, a Web inquirer, a direct mail der, and a person who requested information at your trade show booth would all

respon-be considered prospects A customer is someone who has made a purchase from your company The phrase direct marketing is used as the umbrella term for the con-

cept of generating response from advertising communications, capturing that

response, and nurturing the respondent I use the term direct response advertising to

describe ads designed to solicit immediate response from readers E-mail, bannerads, print ads, and direct mail packages are examples of direct response advertising

xxii Introduction

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STRATEGIC PLANNING

All men can see these tactics whereby I conquer, but what

none can see is the strategy out of which victory is evolved.

—S UN - TZU Chinese military strategist

Strategic planning is one of the most-discussed aspects of business marketing Ifyou ask ten marketers to define strategic planning, you will inevitably receive elevenopinions For our purposes, strategic planning is the process of collecting market-ing intelligence on your company and your competitors, analyzing that information,and then formulating an action plan to achieve your stated objectives

Consider the philosophy of General George S Patton on strategic planningand the study of the competition:

I have studied the enemy all my life I have read the memoirs of his generals and his leaders I have even read his philosophers and listened to his music I have studied in detail the account of every damned one of his battles I know exactly how he’ll react under any given set of circumstances And he hasn’t the slightest idea what I’m going

to do So when the time comes, I’m going to whip the hell out of him.

When business direct marketers apply the best practices of strategic planningbefore implementing their business-to-business lead generation campaigns, theydramatically reduce their risk and increase their odds of success Why? Because astructured planning process enables them to examine and evaluate the factors thatwill influence the short- and long-term success of their campaigns—before cam-paign investments

Consider these facts, from Strategic Planning for the Small Business, by Craig

Rice:

McGraw-Hill's Terms of Use

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S.U.R.E.-Fire Direct Response Marketing

• Many managers prefer to guess, to prove they are macho

• Most failed projects occur through ignorance or mistakes

• Management is right only 50 percent of the time

• Most failures occur because managers are too impatient to gather

necessary information

• The cost of getting facts is much less than the cost of failure

• In business, war, and poker, knowledge really is power

The first phase in creating S.U.R.E.-Fire direct response marketing, therefore,

is the implementation of comprehensive strategic planning This strategic planningprocess focuses on collecting information—facts—to determine how you can meetbusiness goals through lead generation and lead-conversion programs

To win at chess, you must understand how to play the game, how each of thepieces can move, how to check and checkmate your opponent, as well as know youropponent’s strengths and weaknesses So too in marketing Those who succeedstart with a sense of what it takes to get to marketing checkmate Like a chess player,

a marketer requires knowledge of the industry (the board), the competition (theopponent), and the tools at hand (pawns, knights, bishops, and other pieces).Finally, great chess players know the psychology of their opponents—how theythink and how they will react to offensive or defensive moves In marketing, we need

to know not only how competitors think, but also how customers think This is damental to selling and to creating customers

fun-Gaining Insight into Your Situation

Thus, the first step in developing an effective business-to-business lead generationprogram is to gain deep insight into your company, your product or service, themarketplace, and your competition Effective campaigns result when you have acomplete understanding of the following:

• Marketing challenges What are the key obstacles to success?

• Product attributes What are both the positive and negative features?

• Product positioning in comparison to the competition How do yourproduct and your advertising stack up against the competition? Are you aleader or a laggard? Why?

• Short- and long-term sales opportunities Where can you have the mostimmediate impact?

• Threats from changes in the marketplace or competition Where are yourcompany and your product vulnerable to market forces?

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To answer these fundamental marketing questions, the S.U.R.E.-Fire directresponse planning process begins with an in-depth information-gathering tech-nique called a SWOT analysis Specifically, a SWOT analysis determines the currentstate of the market and outlines the challenges that lie ahead Businesses often use

a SWOT analysis for overall strategic and marketing planning I suggest that as abusiness-to-business direct marketer, you also use this methodology for specificcampaign development:

Strengths: What do we have that gives us a competitive advantage?

Weaknesses: Where can we be attacked? What don’t we have?

Opportunities: Where are the best markets to g enerate successful results?Threats: What do we need to look out for that would have negative impact

on results?

A SWOT analysis helps you understand the product’s attributes, the tition, and sales opportunities It helps you develop consensus on the scope of themarketing project required to achieve desired sales goals, and to understand themarketing and financial resources available to do the job In addition, a SWOTanalysis gives you valuable input from your management team about key messagesand issues that will need to be tested in the second phase of the S.U.R.E.-Fire plan-ning process, Understanding for Empathy Another benefit of a campaign-specificSWOT analysis is that it brings out the painful truth about how much or how littlemarketers, salespeople, and top management know about their product, the com-petition, sales goals, and market threats This might seem less than positive, but it

compe-is quite valuable A SWOT analyscompe-is reveals the marketing assumptions made withinthe walls of the organization and reduces false beliefs about how marketing and salessuccess can be achieved

SWOT Analysis for a Lead Generation Campaign

A SWOT analysis conducted for a business-to-business lead generation campaignhas a narrower focus than a SWOT analysis meant to support a companywidestrategic plan Instead of taking days, it generally takes only four to six hours Datagathering is best conducted in a room where all members of marketing, sales, andmanagement who are invested in the program’s success can sit comfortably It isvaluable to have two people conducting the session, a moderator to facilitate themeeting and a scribe to take notes If people are geographically dispersed, a SWOTsession can be conducted via a conference call Because a SWOT is the first—andlikely the only—chance a direct marketer has to bring together the entire marketing

Strategic Planning

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and sales team, it is important to invite all individuals responsible for lead tion or with a perspective about the role lead generation plays in making sales.Typically, that includes the vice president of marketing, marketing manager, adver-tising manager, direct marketing manager, product manager, research director, vicepresident of sales, sales manager, fulfillment manager, telemarketing unit man-agers, telemarketing personnel, executive staff, key sales representatives, and keydistributors.

genera-The following questions provide an effective guide to moderating a SWOT

meeting The word product is used to represent the product or service that you and

your company want to promote

Assess Your Strengths

In the first part of the SWOT session, the goal is to identify the most importantattributes of the product Begin by asking about the product’s strengths, focusing

on its three most important or unique strengths in the marketplace This helps ticipants narrow their thinking and focus on the top characteristics of your prod-uct: Is it the least expensive, the highest quality, the most durable, the most flexible,the most powerful? After determining the top three strengths, it is valuable to askwhat other characteristics or benefits the product offers This gives participants per-mission to expand their thinking and generate additional ideas

par-In addition, ask in what way the product or service is superior to that of thecompetition This question is key in identifying important differences between youand your competitors You can leverage these differences in your direct marketingcommunications to distinguish your company and product

You should also examine company strengths that could be considered assetsvis-à-vis the product, such as brand awareness, marketing muscle, distribution,and a skilled sales force What can you leverage to succeed? Is your company orproduct well known? Do you have an extensive distribution channel?

Finally, how does the marketplace and competition perceive and react to yourstrengths? This is where you compare your internal company beliefs to externalmarketplace perceptions Sales executives who see prospects and customers will havethe most input on this question

Understand Your Product’s Weaknesses

In the second part of the SWOT session, you’ll examine weaknesses The goal is todetermine the obstacles or problems that your product poses and that you will need

to work around Now you want to search for the hard answers What are the

prod- S.U.R.E.-Fire Direct Response Marketing

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uct’s three biggest weaknesses or negative features? What doesn’t your producthave? What weaknesses or missing features will the sales force need to sell around?

Do not be afraid to continue probing for additional weaknesses Again, this is achance to squeeze more information from your participants

On the other hand, you should also delve into what can be done to improvethe product Contrast your company with the competition Are competitors alreadymaking improvements? Have competitors already addressed these issues?

Return to issues related to the company itself: What company weaknessescould be considered liabilities vis-à-vis the product, such as no brand awareness,limited marketing resources, no distribution channel?

Once again, a sanity check is needed to compare internal beliefs and tions to marketplace realities How do the marketplace and competition perceiveand react to these weaknesses?

percep-Seek Marketing Opportunities

In the third part of the SWOT session, the moderator is looking for participants toprovide ideas for the most effective marketing opportunities The focus is on thebest place to invest marketing dollars to generate the largest return in the shortestperiod of time What targets, markets, segments, titles, companies, and industriesshow a deep need for the product or service? This question is designed to identifymarkets or groups of individuals that desire or need your product It is far easier togenerate leads from audiences that are in need than from those that require educa-tion about why they need your product

You also want to investigate the size of the opportunity to find out where, inthe long term, the large market opportunities are Which opportunities can gener-ate the most revenue for your company? What needs to be overcome to leveragethese large market opportunities? Do you need a special sales force? Do you need

to modify your product for the market? Do you need case studies showing that ers are using your product in a given market?

oth-Carefully consider any marketing edge you may have, such as marketingopportunities the competition doesn’t know about What do you know that yourcompetitors do not? For example, have you identified a trade show or market seg-ment they have not?

Opportunities also stem from the characteristics of the market: Is the marketgrowing, dying, static, changing? Are people looking to buy, or is the market in astate of contraction? For example, the marketplace needs your product, but thenumber of companies you can sell to is shrinking These questions are required togauge your future opportunity

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Deal with Threats

Finally, the moderator should get participants to identify what the marketing teamneeds to watch out for—ripples in the market or in competitive response that couldimpact the marketing program What changes in the market could influence thesuccess of the lead generation campaign? This question is designed to identify any-thing on the horizon that could have a long-term impact on results, such as changes

in interest rates, a softening of the stock market, import-tax increases, or new ernment regulations

gov-Short-term changeability can also have major effects on marketing: Will sonality impact program success? Will time of year impact response rates and sell-ing patterns? Are you going to be marketing during a favorable or unfavorable time

sea-of year?

Look for peculiarities of the market too, since these may afford opportunities

or have negative impacts What trade shows, competitive events, or promotionscould hurt the program? What are important trade show dates? Are you affected byyear-end holiday closings? Are your prospects focused on taking care of their busi-ness and not interested in looking at your product at certain times of the year?

Analyze Your Competition

Now you need to repeat the procedure by going through the SWOT questionprocess for the top three to five competitive products or companies In this part ofthe process you will discover how much or how little you know about your com-petitors Questions include:

• What are their strengths?

• What are their weaknesses?

• What are their opportunities?

• What are their threats?

• What are their marketing and sales tactics?

• What are their prices?

• What are their distribution methods?

Further Analysis

Since you seldom have all key marketing, sales, and executive personnel in a room

at the same time, it is valuable to ask some additional questions during the SWOTsession The following questions can provoke useful marketing insights

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Identifying the Target Market

Your first question should focus on what markets or industries should be targeted

Is there a consensus? Can you identify the industries by SIC (standard industryclassification) code? Conversely, you should also determine which industries to

Strategic Planning

Tips for SWOT Implementation

• Distribute the SWOT questions to all participants a few days before the meeting

• At the start of the meeting, the moderator should restate the goals of the meeting

and the purpose of conducting a SWOT analysis The moderator also should explain

the SWOT process

• Draw a four-by-four SWOT grid on a large pad or board to help you categorize

infor-mation for your product and competitors Write SWOT vertically and then place your

product and the names of each competitor in each column horizontally

• Begin asking the entire group the SWOT questions, in order.

• Write down all relevant points the attendees give the moderator.

• The moderator must draw no conclusions about information the group provides,

instead simply posting it for review and summation at the end of the meeting.

• Keep the meeting moving Don’t allow the discussion to snag on any one point

• To enable the group to gain focus and momentum, always start by asking the

strengths of the product or service to be promoted Then go through the questions

about weaknesses, opportunities, and threats

• Ask the exact same questions in the same order for the top three to five competitive

products.

• It is important for the moderator to probe and to be flexible during questioning and

to allow the group to digress on tangential marketing or sales issues as they arise A

SWOT analysis brings out all marketing issues relevant to the lead generation

process, and the moderator must conduct the meeting in a way that encourages the

discussion of valuable ideas that arise unexpectedly

• Ask participants about two types of strengths and weaknesses during a SWOT

ses-sion First, ask about factors that can impact lead generation, such as unique features

that grab a prospect’s attention and cause him or her to want to find out more about

the product or service Second, ask about factors that impact the sales process and

help win a sale, such as a unique cost-value ratio.

• After all the information is collected, perform a sanity check Ask, “Does the marketplace

perceive the strengths and weaknesses expressed today in the same way as the people

in this room?” Remember that the perceptions of external prospects are your

market-place realities.

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exclude What do you want to avoid? Don’t waste money contacting people whocannot become your customers The goal of direct marketing is to target your mes-sage For example, do you want to exclude certain industries, geographic areas,and/or companies that have just purchased your product category in the past year? Your goal is to produce the highest return on your marketing investment Donot waste money mailing to companies that are probably too small to purchase yourproduct What is the employee or revenue size you should target? Where is your best revenue opportunity? Should you spend time on small companies or bigcompanies?

Search for all the ways to focus your effort on your target, and determinewhat other criteria should govern target selection Criteria include geography, theage of the business, the company’s growth rate, companies just going public, anddot-com companies The better picture you can paint of your target audience, thebetter targeted your marketing will be

Does your customer base match the targeting criteria you have identified? Ifnot, make sure that there are valid reasons—are you being overly optimistic regard-ing the segments that would be interested in your product? These questions aredesigned to determine if the past is reflective of the future Have past marketingefforts skipped these market opportunities, or have new market segments arisenfrom changes in the marketplace? Consider, for example, the birth of dot-comcompanies A follow-up to this question is: Why have you been unable to sell to allyour market segments in the past? Is it because of a lack of resources or a lack offocus?

Targeting the Right T itles

As a continuation of painting a picture of your target market, look at functionaltitles Identify the departments (such as operations, finance, or information systems)and the levels (such as VP, manager, or staff) of the people who might initiate con-sideration of your product or service Try to determine what titles will start the salesprocess and what titles have the authority to purchase Asking your salespeople isone of the best ways to get this information Have them look over their contact data-bases so they do not rely on their memories

You also want to seek out the target market’s sources of industry information.What publications and books does the target read? How do they stay current?Where do they turn for education? What conferences or trade association meetingsdoes the target attend? This is a follow-up to the questions above about the com-petition’s use of seasonal selling or trade shows All of this information will help youwith your list or media selection process

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Solving the Target Market’s Problems

This group of questions is designed to help you collect information on the belief tems and perceptions of the target audience First, try to determine what customersworry about: What problems do they struggle with daily? What keeps them up atnight? What magic solution are they looking for? Once you ascertain what problemsyour customers face daily, focus on how your product addresses these pains.Compare the product features and benefits to the problems faced by customers.How many problems does your product solve? Understanding this is critical fordeveloping effective lead generation campaigns

sys-What are members of your target market doing now to deal with these lems? This question will help you to figure out what your target audience is doingwithout you People are rather innovative They can find many different solutions

prob-to their problems Is their current solution inadequate? Do you need prob-to address this

in your marketing? Next, determine why members of the target audience wouldswitch to your product from what they are currently using After all, people arereluctant to change What will move them to action? Some economic force, like E-commerce, may already be forcing a change in your target market What is this dri-ving force, and how can you capitalize on it?

Establishing Sales Process and Goals

During your SWOT, you need to understand fully the sales situation and theresources available to achieve the desired financial objective This set of questionscan help establish the objectives for a given program as well as for all lead generationcampaigns This information will be used in more formal mathematical calculations

in Chapter 2

Among your first tasks are determining the sales goals and how much revenuemanagement is looking to generate over a certain period of time Do you need togenerate $5 million in six months or $50 million in one year? Estimate how manyproducts or units will have to be sold to meet these goals This is calculated by divid-ing the financial goal by the average selling price (ASP) of the product

The number of salespeople or distribution outlets in place to meet these goals

is an important factor Do you have five or five hundred salespeople? A salespersoncan only generate so much revenue; there are only so many hours in a day

You also need to ask whether your sales goals are consistent with the number

of companies that can realistically buy the product In other words, are there enoughprospects to meet the sales goals? Are there a thousand prospects or one hundredthousand prospects? Are the goals realistic given these numbers?

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Thoroughly review the lead-capture, qualification, and distribution process.

If this is the first meeting, you need to gain a detailed view of the current state ofthis process How are leads captured? What happens when a lead is captured? How

is a lead qualified? When does it go to the field and by what criteria? What attention

do responders receive? How fast do they receive the information? What happensafter the lead is sent to the field and information is sent to the responder? How doyou report on the disposition of a lead?

Focusing on a Message

When you turn to this line of questioning, let the participants pretend that they arethe advertising agency What you want to do is open up their creative minds.Encourage your participants to generate ideas I have found that everyone is cre-ative, and gemlike ideas can come from asking questions about messaging.Remember that all the information collected will be validated in the next phase ofthe S.U.R.E.-Fire planning process

Start with an open-ended question that will free up participants’ thinking Forexample: “If you had a magic wand, what three messages would you include in thepromotion?” You are asking them to take the limits off their thinking The phrase

“magic wand” gives them permission to imagine that anything is possible So givethem the freedom to think daringly, and listen to what they say And remember thatsometimes the best ideas are not the first ideas Keep asking Squeeze a little moreout of your participants

After your participants imagine what they want to say, it is time to ask if thereare any facts or proof points that can lend credibility to the promises What support,claim, endorsement, or testimonial can be used as proof for these messages?Specifics add credibility to your message

Tracking Your Marketing Programs

To discuss these questions, it is useful to have participants bring trade magazines,company and competitors’ literature, direct mail packages, print advertisements,and sales letters to the SWOT session Your goal in this part of the session is to assesswhat worked and what did not work Studying the history of your campaigns orprograms is valuable It can keep you from repeating mistakes It also can generateideas for new programs based on refinements to past programs The followingquestions speak for themselves

• What marketing programs have worked or failed in the past?

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• What offers have you used? What worked, and what failed?

• What existing offers may be used in future lead generation campaigns?

• What source provides the highest-quality sales leads?

• Why is a marketing program needed? Why can’t the sales organization

just pick up the phone and be successful?

• When do customers buy? What are the best months and the worst months?

• Where do customers buy? What distribution channels do they prefer?

• What is your share of the total market? What are the trends in your sales,profit, and market share?

Summarize the Answers

After the moderator has asked all the questions and displayed the answers aroundthe room, it is time to summarize Starting with the product or service to be pro-moted, the moderator needs to review the information provided and see if there areany more ideas to capture The moderator should note key opportunities for explo-ration and validation After the session, the meeting notes should be typed and dis-tributed to all participants for review and approval The moderator and participantsneed time to digest the information before reaching any conclusions

When drafting the SWOT conclusions, distinguish the difference betweeninternal beliefs and marketplace perceptions about strengths and weaknesses Usethe information from the SWOT session to find a direction, but don’t draw finalconclusions The central concept of the S.U.R.E.-Fire planning process is to useexternal conversations and market research to validate or contradict informationgenerated during the SWOT session

Look at both aspects of the sales process—how people are brought into the salespipeline, and how they are converted into customers Try to determine whether thetarget identified during the SWOT analysis is a “hoped-for” market In other words,

is it a market in which salespeople or executives wish the product would sell, or is it

a market in which the product is currently being sold? Asking what percentage of rent customers matching the profile outlined in the SWOT session can validate this

cur-Competitive Advertising Review

To succeed in business, you must not try to fight competitors using brawn Only thebiggest organizations have the money to slug it out with their competition The rise

of the Internet, database marketing, data-mining techniques, and other new

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research methodologies are leveling the playing field Instead of out-muscling petitors, I encourage you to out-think them The simple truth remains: you can’tbeat competitors if you do not know them, yourself, and your customers Gainingthese levels of knowledge requires patience As British statesman and novelistBenjamin Disraeli said, “Patience is the necessary ingredient for genius.”

com-The SWOT analysis is just the first step in identifying market opportunitiesand crafting a unique strategy for the promotion After you look at the competitionduring the SWOT, it is useful to look at how the competition positions itself throughthe most visible marketing communications These include trade press ads, Webadvertising, and direct mail Physically looking at competitive advertising providesperspective as to how a particular competitor’s product promotion compares toyours It also will help you develop a lead generation program that contains uniquemessages for your promotion, product, or service It enables you to answer keystrategic questions, such as:

• What is the positioning of competitors, and what promises do they make

to the marketplace?

• How will your future set of promotional messages stack up against thecompetition?

• What messages, offers, and creative strategies do competitors use?

• How much marketing investment is the competition making, and willyour company survive or become buried by those investments?

• What types of advertising, Web-based marketing, and direct mail tions do competitors use?

promo-• What types of messages, offers, and creative implementations must beavoided so future promotions do not look like competitors’ promotions?Conducting a competitive advertising review is not difficult, but it doesrequire time and careful record keeping Here is a practical approach

Collect six months’ worth of the publications in which your company and itscompetitors frequently advertise Then, remove all the competitors’ ads from thepublications and pin the ads to the wall Note the date and name of the magazinefrom which the advertisement was removed Pinning the ads on a wall makes it pos-sible to scan the entire range of competitive messages at once

Carefully study the advertising messages What are the competitors nicating to prospects? What visuals are they using? Is their advertising buildingbrand awareness? Is it geared to generating leads, or does it have multiple objectives?

commu-If lead generation is the goal, what is the offer? Does the competitor use a magazinebind-in reply card? How large are the ads: full page or fractions? Are the competi-tors using four-color, two-color, or black-and-white graphics? In a table, summa-

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rize the tag lines, key selling messages, offers, and size and frequency of placementfor each competitor This enables the marketing team to compare various compet-itive positioning approaches, creative executions, key benefit messages, tone, offers,and tag lines.

Also visit each competitor’s website Print out the home page and the pagescontaining key messages and methodologies Pin these up too Repeat the samereview and analysis process for each competitive website Later on, you can place allthe ads and the website material in a notebook for future reference

To further test your competitors’ systems, you can respond to their advertisingand collect fulfillment information See how long it takes to receive the fulfillmentinformation, and study what is delivered Competitive fulfillment packages play a cru-cial role as you construct or refine your own follow-up materials Is the informationsent extensive or brief? Does it drive the recipient to buy? Does it connect the recip-ient with a salesperson or sales channel? Is there a next step in the buying process?Does the fulfillment information convince the recipient to take that next step?

By reviewing all competitive information, either pinned up on a wall or in ahandy binder, you can gain an overall impression of what competitors are saying tothe marketplace, the images and graphics they use, and the messages and position-ing statements they convey Review and analysis position you to provide specificdirection to creative resources (or to give the creative resources the chance to reviewcompetitive advertising themselves) and to craft a unique look and message Thisprocess obviates the problem of advertising messages or styles that “accidentally”copy or imitate those of competitors

Determine Competitive Ad Spending

As part of the S.U.R.E.-Fire planning process, you must evaluate how your pany’s marketing voice compares to that of the competition Is your company in ascreaming match? Is your company’s voice the loudest, or is a larger competitordrowning out your company? It is important to know advertising spending levels,because business-to-business lead generation programs generally are more suc-cessful for companies with higher and more positive brand recognition Collectingcompetitive spending levels for advertising and direct mail lets you and your man-agement team know what you are up against

com-The first way to collect competitive advertising spending information is

through “Leading National Advertisers” reports published by Advertising Age If

you are marketing a high-technology product, you can also use information from

Adscope, Inc Both sources provide data on competitive advertising spending by

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company and industry Smaller business-to-business companies that may be

inter-ested in ad spending data that Advertising Age or Adscope do not track can follow

this step-by-step method:

1 Gather six months’ worth of all industry publications

2 Count the number of advertisements the competitor placed in eachpublication

3 Using the publisher’s rate card, determine the cost per ad placementbased on size and color

4 Multiply the number of placements by the cost per placement in eachpublication to calculate advertising spending per publication Bear inmind that most advertisers negotiate lower rates, so your calculationsmay be on the high side

5 Add up total spending in each publication to estimate the competitor’sbudget

6 Repeat the above for each competitor

7 Arrange the competitors’ spending levels in order, from highest to est; then calculate total spending in the category and the percentage eachcompetitor contributed to the total, as in Figure 1.1 This calculationenables you to compare your company’s share of voice in the market-place to that of the competition The analysis reveals whether your com-pany spends as much as its competitors If there is a spending

low-differential, it shows how much

Remember that advertising investments help build awareness in the place and make prospects receptive to lead generation promotions It is harder for

market-an unknown compmarket-any to produce a hugely successful lead generation programthan for a market leader

Imagine that two direct mail pieces arrive in your in-basket on the same day.The only identification on the outside of the each envelope is the company name

 S.U.R.E.-Fire Direct Response Marketing

FIGURE 1.1 Calculating Competitive Advertising and Share of Voice

Competitor A 10 $6,000 5 $50,000 5 $20,000 $410,000 61% Competitor B 5 $6,000 2 $50,000 0 $20,000 $130,000 19% Competitor C 3 $6,000 0 $50,000 5 $20,000 $118,000 18% Competitor D 2 $6,000 0 $50,000 0 $20,000 $12,000 2%

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The first direct mail piece carries the name ACME Software Company, and the ond direct mail piece carries the name IBM Corporation Which one would youpick up and open first? It is human nature to believe that the company you knowand trust has something more important for you than an unknown company This

sec-is the power of brand awareness and its impact on direct mail lead generationpromotions

Collecting Competitive Direct Mail and E-Mail

When time permits, it is advisable to conduct a competitive analysis of competitors’direct mail and E-mail in addition to their print advertising Gathering direct mailand E-mail pieces is much harder than collecting competitive print ads becausedirect mail and E-mail are “out of public view.” However, I have found some effec-tive ways to collect competitive samples

Ask all your sales personnel and internal staff to collect and save all the petitive direct mail, E-mail, and electronic newsletters they receive Those who sub-scribe to major industry trade publications receive competitors’ messages by virtue

com-of being on the publication’s list, which it sells to advertisers Be sure everyone is onthe lookout for these promotions

A more active collection method is to send a research-request letter to a group

of fifty to one hundred key customers Ask them to collect and save all direct mailand third-party promotional E-mail for two to three weeks and return the entire lot

to you at your expense Provide a large FedEx envelope with the shipping label filledout and attached Tell the customers that when they return their pile of direct mailand E-mail to you by a certain date, they will receive a valuable thank-you gift fortheir trouble

You’ll be amazed by how much direct mail and E-mail your customers receiveweekly from competitors—and from anyone else who believes these customers aregood prospects (it is also enlightening to see the wide range of direct mail and E-mail promotions)

After you receive the samples from your customers, sort it by competitor and

by product promotion Then repeat the competitive advertising review processconducted for print advertising and websites When looking at competitive directmail or E-mail, ask the following questions:

• What size direct mail package do competitors send?

• What is the outer message? Is there a teaser headline, or is it blank?

• What is the subject line?

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• What is the objective of the direct mail package? Is it lead generation?Sales channel support? Direct selling?

• How did the E-mail begin? Where did it direct the reader?

• What is the offer? How is it merchandised?

• What are the package’s tone, color, graphics, and key benefit messages?

• What percentage of the package sells the product or service instead of ing the reason to respond?

sell-Given that direct mail and E-mail advertising changes quickly, this kind ofinformation gathering should be conducted at least twice a year to stay current withcompetitive advertising strategies and messages

Summing Up

Strategic planning does not mean cloning a competitive strategy Craft a distinctivestrategy suited to your company and product This can be accomplished only bythoroughly understanding your own product, its relationship to the competition,and its position in the marketplace

You must understand the marketing challenges and obstacles you face, and aSWOT analysis focused on lead generation is one analytical tool you can use to col-lect information During the SWOT analysis, focus on uncovering your company’sstrengths, weaknesses, opportunities, and threats Begin by examining the targetmarket’s characteristics Look at your sales process and goals, your messaging, andprevious marketing programs that have worked well—or failed miserably Besidesserving as an assessment of your own product and organization, a SWOT analysisgenerates information about competitors You can investigate your competition fur-ther by gathering their direct mail pieces and analyzing their reach and effectiveness

 S.U.R.E.-Fire Direct Response Marketing

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